Private equity giant Blackstone to pump billions into UK infrastructure projects
One of the world’s biggest private equity firms is ready to pump billions of pounds into British infrastructure projects in a resounding vote of confidence in the UK economy.
Blackstone, which manages assets worth more than £440billion globally, said it was ‘bullish’ about Britain’s prospects following Boris Johnson’s election victory in December.
It is setting up a British team as it prepares to scour for deals to back, including upgrades of electricity grids, water systems and broadband networks, as the Prime Minister plots a spending spree.
Blackstone is setting up a British team as it prepares to scour for deals to back, including upgrades of electricity grids, water systems and broadband networks
The firm yesterday said it had hired Jon Kelly, who was head of Europe at rival private equity giant Brookfield, to run a ten-person unit in London.
Blackstone is understood to believe that Brexit has caused UK assets to become undervalued. It plans to use some cash from an £11billion Saudi-backed fund that was previously earmarked largely for US infrastructure projects suggested by Donald Trump.
UK’s biggest projects
£106billion: Projected cost of HS2
£51billion: Investment planned by water firms during the next five years
£11billion: Upgrades by National Grid during the next decade
£3billion: Annual spend of BT’s Openreach on mobile upgrades
£538million: Paid by consortium for broadband builder Cityfibre
£39billion: Estimated cost of Northern Powerhouse Rail scheme
The American president promised new roads, bridges, railways and airports but he has failed to persuade lawmakers to back his proposals.
The UK could now account for a quarter of the Saudi-supported fund’s investments.
Sean Klimczak, Blackstone’s global head of infrastructure, told the Financial Times: ‘As we look at the UK, we’re quite bullish. We see the UK as being undervalued and see significant opportunity.’
Kelly is due to start leading his team in April, when he will officially join Blackstone.
It comes as Johnson’s government is preparing for its first budget under Chancellor Rishi Sunak, with a series of big commitments to infrastructure.
Johnson has already given the High Speed 2 railway the final go-ahead, despite huge budget overruns.